Chola Investment Q1 net profit rises 28% to Rs 726 crore

economictimes.indiatimes.com:

Cholamandalam Investment and Finance, the non-banking finance company of the Murugappa Group, reported a 28% growth in net profit year-on-year to ₹726 crore in the quarter that ended June 2023 from ₹566 crore a year ago led by strong growth in assets under management (AUM). Assets rose 42% year-on-year to ₹1.22 lakh crore from ₹ 86,703 crore a year earlier.

Total disbursements rose 50% to ₹20,015 crore during the quarter from ₹13,329 crore a year ago led by an identical 32% growth in its vehicle finance and loan against property (LAP) business. Net income increased 30% YoY ₹2,127 crore despite a 77% increase in finance costs largely because loan growth made up for the higher cost of funds.

Net non-performing assets (NPA) dropped to 2.82% in June 2023 from 3.11% in March 2023. «Profit before tax grew 27% as compared to overall asset growth of 42% because the cost of funds was lowest in Q1 of FY 23 and progressively increased over the subsequent quarters.

Vehicle Finance book is a fixed rate book whereby repricing of the portfolio happens progressively, as the proportion of the new book is replaced with higher yield book,» Chola said in a press release. The company's board has approved capital raising by way of qualified institutional placements.

It is targeting to raise ₹ 4000 crore subject to necessary approvals. The company said it holds a cash balance of ₹7,069 crore at the end of June 2023.